The 20 Rising Stars of Retirement Plan Advisory 2008

The first and logical response to that reality was to offer investor education. Surely, once individuals realized the benefits they were missing, they would mend their errant ways and join their fellow participants. There was more than altruism in this effort by money managers. Maximum participation means more assets under management, higher fees for the managers and often better rates and options. For large plan sponsors, near-full participation can vault them into the ranks of institutional investors. But a funny thing happened on the way to maximum participation. After a short blip, investor education often did not bring the missing sheep back to the flock. Now, money managers are re-tooling investor education. The messages have become simpler and often a modular approach is being adopted. Another big boost has come from the government. With the safe harbor provisions of the Pension Protection Act, plan sponsors can automatically start putting 3% of their employees’ salaries into a 401(k). That can be raised over time to 6%, although individuals can still opt out. While there is a fear of people staying on auto-pilot and never going beyond the 6%, the greater hope is that once employees have some skin in the game they will have the incentive to manage their money. Even better for money managers, there are indications that participation in a company-sponsored retirement plan is often a stepping stone to wider financial involvement, such as investing and insurance. Often those initiatives are started with the retirement plan provider. The Personal Touch Part of providers and sponsors refining their message is asking better questions, said Barbara Hogg, head of the retirement communications practice for Hewett Associates. A recent study by the consultancy shows that from 2003 to last year the portion of employers with investment education programs for their employees has held level at about 90%. However, that is up from the 2001 level of 85%. SEPTEMBER 2008 Doing Well By Doing Good Providers and sponsors of 401(k) plans look to re-tool investor education for participants’ benefit, as well as their own By Gregory Morris A S ASSETS IN A COMPANY’S retirement plan grow, plan providers and the fiduciaries at the sponsoring employer stand to gain. Unfortunately, individual participation in 401(k) and 403(b) plans has hit a plateau of around 75% in recent years, proving that even giving away free money is not sufficient incentive for some workers to plan for their own retirement. 6 RETIREMENT PLAN ADVISORY RISING STARS

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The 20 Rising Stars of Retirement Plan Advisory 2008 Contents Doing Well By Doing Good The Post-PPA Bounce Automatic Enrollment vs. Managed Account Unfair Advantage? You Bet The New World Order 20 Rising Stars of Retirement Plan Advisory Mentors’ Page

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